Zero-coupon bond

A zero-coupon bond (also discount bond or deep discount bond) is a bond bought at a price lower than its face value, with the face value repaid at the time of maturity. Note that this definition assumes a positive time value of money. It does not make periodic interest payments, or have so-called "coupons", hence the term zero-coupon bond. When the bond reaches maturity, its investor receives its par (or face) value. Examples of zero-coupon bonds include U.S. Treasury bills, U.S. savings bonds, long-term zero-coupon bonds, and any type of coupon bond that has been stripped of its coupons.

In contrast, an investor who has a regular bond receives income from coupon payments, which are made semi-annually or annually. The investor also receives the principal or face value of the investment when the bond matures.

Some zero coupon bonds are inflation indexed, so the amount of money that will be paid to the bond holder is calculated to have a set amount of purchasing power rather than a set amount of money, but the majority of zero coupon bonds pay a set amount of money known as the face value of the bond.

Zero-coupon bond

A zero-coupon bond (also discount bond or deep discount bond) is a bond bought at a price lower than its face value, with the face value repaid at the time of maturity. Note that this definition assumes a positive time value of money. It does not make periodic interest payments, or have so-called "coupons", hence the term zero-coupon bond. When the bond reaches maturity, its investor receives its par (or face) value. Examples of zero-coupon bonds include U.S. Treasury bills, U.S. savings bonds, long-term zero-coupon bonds, and any type of coupon bond that has been stripped of its coupons.

In contrast, an investor who has a regular bond receives income from coupon payments, which are made semi-annually or annually. The investor also receives the principal or face value of the investment when the bond matures.

Some zero coupon bonds are inflation indexed, so the amount of money that will be paid to the bond holder is calculated to have a set amount of purchasing power rather than a set amount of money, but the majority of zero coupon bonds pay a set amount of money known as the face value of the bond.

Latest News for: zero-coupon bonds

The home-loan arm of Denmark s Jyske BankA/S is offering a new bond, a callable note maturing in 2030 with a coupon of zero... below zero for years now ... The zerocouponbond likewise reflects the fact that there s lots of liquidity sloshing about and too few highly rated assets....

Five months - that’s how long it takes Country Garden Holdings to start selling apartments after acquiring land ... The pressure to finish comes from the markets ... Read More ... DHFL Pramerica Ultra Short-Term Fund had more than 34 percent of its net assets in a zero-couponbond issued by its parent Dewan Housing at the end of last month ... Bloomberg. Updated ... ....

Mumbai. Five months. That’s how long it takes Country Garden Holdings Co. to start selling apartments after acquiring land ... The pressure to finish comes from the markets ... DHFL Pramerica Ultra Short-Term Fund had more than 34 per cent of its net assets in a zero-couponbond issued by its parent Dewan Housing at the end of last month ... — Bloomberg. ....

both stocks and bonds produce regular returns which can be described as "coupons," making stocks and bonds directly comparable to bonds. The "equity bond" and ...Bonds do not enjoy internal compounding (aside from zerocoupons, of course, which present an unpleasant tax consequence)....

Given the relatively low-yield on residential real estate in Indian cities (at 2-3 per cent annually on average), investors need to view the residential segment more as a zero-couponbond structure, where buying the asset at a relative discount to intrinsic value can eventually create returns when the asset is sold off ... ....

The bank was embroiled in the controversial PEACE bonds scandal involving 12-year long-term zerocouponbonds (Zeroes), its withholding tax issues, and a very unusual deal where a non-government organization lacking a securities dealership license was able to raise millions ......

Gold’s job is to be a reliable store of value – and sometimes, zero is the best deal in town. By delivering a zero real-return over time, that periodically means a price surge followed by a prolonged period of catch-down ... The AtlasPulse fair value model (see chart below) treats gold as a 20-year, zerocoupon, inflation-linked bond....

What are zero-couponbonds? – R.L., Cadillac, Michigan... With a zero-couponbond, you collect no interest payments, but the amount you lend is less than the amount you’ll receive at maturity. Thus, a zero-couponbond might pay you the equivalent of 3 percent per year by having you lend $7,441 today in order to receive $10,000 in 10 years....

ASK THE FOOLZeroing in on bonds Q. What are zero-couponbonds? A. They’re regular bonds — with a key difference. With a bond, you lend money, typically to a company or government. When you buy a traditional $10,000bond sporting a 3 percent interest rate, you’re lending $10,000 to the borrower, and you can […] ... ....